Following the backlash over WeTransfer’s controversial new terms of service, research shows 68% of people never fully read or understand the contracts they sign.
The findings are from The University of Law (ULaw), with one expert from the University urging people to always be sure what they’re signing up for.
Caitlin Worton-Scott, Solicitor and Senior Lecturer at ULaw said: “Unfortunately, contract terms and conditions are often incredibly long and filled with jargon. It’s so easy to scroll past or just skim read, but it is risky business signing a document when you have no idea what’s in it. If you run into something you don’t agree with, but you’ve already signed up for it in your contract, you’re going to find it very difficult and practically impossible to do anything about it.”
Here are five common contract terms Caitlin says to look out for:
- Condition, warranty and innominate term
These words seem like they can be interchangeable, but they have very different meanings and consequences. These are three types of contract terms and the severity of a breach of contract will depend on which type it is.
- Condition – If a condition is breached, either party can end the contract
- Warranty – If there is a breach of warranty you can claim damages but not end the contract
- Innominate term – The resolution will depend on how serious the breach was
It’s important to understand where you stand here, so you know your rights should anything need to be disputed.
- Non-reliance and subject to contract
These are two common clauses that ensure the only binding rules are those which are written in the contract.
What this means is that neither party can be held to anything that has been said before the contract, be that verbally or in writing (e.g. in an email). It’s common to believe that if something has been said in writing it will be legally binding, but if a non-reliance clause is in place, or it’s been stated that something is subject to contract, then this isn’t true.
This is particularly worth keeping an eye on when you’re being sold something. Be mindful that a salesperson hasn’t sold you the dream only for it not to be upheld in the contract. Always double check that exactly what you’ve agreed to is in the contract and not just in an email or worse still a telephone conversation.
- Entire agreement clause
This is similar to the above and acts as a “catch all” to ensure the only things that are legally binding are those detailed in the contract.
This means that anything that has been discussed in a meeting, on a phone call or email – anywhere that isn’t the final contract – is totally disregarded.
In plain English, if it isn’t there in the final contract wording then it may as well have never existed.
- “Best endeavours” vs. “Reasonable endeavours”
Two very similar phrases with a subtle yet important difference. If you see either of these in your contracts, they are referring to the level of effort required to enact something.
Best endeavours asks that you do everything you possibly can and explore every single avenue to make something happen or rectify an error. Reasonable endeavours is similar but asks that you try but not at great sacrifice or cost.
Of course, what is considered great sacrifice or cost could be up for debate so it’s important to get clarity on this if you do see this wording in your contract.
- Severability
Severability is an important one to look out for if you believe a clause in your contract has been broken.
People will often assume that if one part of a contract fails or is breached then the whole thing is void, but severability stops this from happening. This wording means one part of the contract can fail or fall apart and it won’t void the whole contract.
It’s worth checking if this is written into your contract and if so, which clauses it applies to. It could be used to allow a supplier to breach one or more terms while keeping you tied to the contract.
Caitlin continues: “In a world that is increasingly seeking to gather personal data and tie us all up in contracts, it has never been more important for us all to understand what we’re signing up for and to know our rights. Some businesses depend on consumers ignoring lengthy T&Cs and before you know it, you’ve signed your rights away.
“While it’s tempting to skip through and tick the box or sign on the dotted line, I would urge everyone to always read their contracts and don’t be afraid to question anything that isn’t 100% clear.”